Overseas Automakers Top US Ad RoI

News, 26 November 2007

BOSTON: It is not only in terms of reliability and value that imported car marques succeed in the highly competitive US auto market. Importers' advertising return on investment also overtakes domestic rivals.

Data released this week by Boston-based researcher Compete, reveals that in 2006 overseas automakers spent an average of $182 on advertising for each unit sold This compares with $223 spent by US manufacturers - a differential of 22.5%.

Topping the ad RoI poll for 2006 was Honda at $118, followed by Toyota's $158. Among companies with annual US sales exceeding a million units, Ford registered the worst RoI with $240 per unit sold.

Observes Compete's head of automotive practice Mike Jennings: "The smaller brands with a clearly defined target performed the best. Brands like Scion and Mini have a product line that also corresponds, whereas Ford has to go from an F250 truck to a Fusion. It shows a fundamental of marketing, which is: 'ID a target and hit it.'"

The study was compiled by melding adspend figures from Nielsen Monitor-Plus with data culled by Compete from 29 third-party auto shopping sites.

According to industry insiders, ad RoI for cars is harder to measure than other consumer products.

Explains Wes Brown, an analyst at Iceology, a consultancy that explores consumers' interaction with markets, brands and products: "These are very tough to measure in auto; and ROI looked at like this can be affected by all kinds of things.

"You look at the import brands and they have enjoyed this tremendous success with brand image, so they can spend less for more shoppers.

"And you look at domestics and they have things like incentives and they have to spend on those, which drives the costs up.

"An agency and a manufacturer has to look at this and put it in context before they say they aren't getting their money's worth out of advertisements."

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